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HomeMy WebLinkAboutCSD-07-035 - SOCAN Fees at Community Services Facilities ) R Community Services Report To: Date of Meeting: Submitted By: Community Services Committee April 2, 2007 Prepared By: Ward(s) Involved: Date of Report: Report No.: Subject: Mark Hildebrand, Interim Director, Community Programs and Services Natascha VolI, District Facilitator (Ext. 2503) All March 22, 2007 CSD-07-035 SOCAN FEES AT COMMUNITY SERVICES FACiliTIES RECOMMENDATION: For Information. BACKGROUND: SOCAN, the Society of Music Composers, Authors and Producers, is a copyright collective representing more than 80,000 Canadian music creators and publishers and, through affiliated performing rights organizations (PROs), hundreds of thousands more worldwide. The performing rights that SOCAN administers on behalf of creators of musical works, and their publishers, are granted under Canada's copyright Act. In order to use music as part of any business, individuals need a performing rights licence. SOCAN grants such a licence, allowing people access to virtually the world's entire repertoire of copyright-protected music for communication and public performance, at rates approved by the Copyright Board of Canada. A SOCAN performing rights licence ensures that the music and the rights of those who create and publish it are respected. SOCAN collects licence fees and, after its operating costs are deducted, distributes the revenue as royalties to its members (songwriters, composers, lyricists and publishers) as well as to affiliated international societies for their members. More than 800/0 of the monies received from fees are distributed to the music creators and publishers entitled to it. SOCAN charge tariffs and fees to the facility owners and expects them to pass these on to the appropriate user groups operating out of the facilities. SOCAN are now actively looking at all recreational facilities, investigating where tariffs may apply and contacting municipalities to initiate payment. As of January 2007, the City of Kitchener has been requested to pay applicable SOCAN tariffs for all revenues collected from CSD-07-035 Page 2 all programs that use music in all City of Kitchener facilities. This includes City of Kitchener programs run directly and those run by our affiliated Neighbourhood Associations. REPORT: SOCAN contacted staff at the City of Kitchener last spring to inform that as of January 1 , 2007 a charge would be issued for all programs offered at City of Kitchener facilities that use music. The City of Kitchener currently is a customer of SOCAN and already pays tariffs associated with special events, music used in arenas, and facility rentals when appropriate. The tariffs for these events are charged back to the user groups. Fees have not been charged for many of our land based and swimming programs run directly by the City of Kitchener, or Neighbourhood Association programs that use music. City staff has been working with SOCAN over the past 11 months to investigate the implication these tariffs will have on programs offered through our resource centres and pools. Less of a concern are those programs offered by the City of Kitchener. Budget adjustments will be made to accommodate for 2007 and minor changes will be made in the fees and charges for 2008 to recuperate these costs. However, with many of our resource centres the programs using music are, in fact, run by the Neighbourhood Associations. Due to the high SOCAN fees charged for facility rentals, City staff have been concerned about the impact the fees would have on this programming at our centres. Neighbourhood Association programs are typically very price sensitive and could be vulnerable to an additional significant expense. Because staff didn't want to alarm Associations, they worked with SOCAN to carefully identify the programs that use music to ensure we were charged accurate tariffs. Although findings have to be confirmed with Neighbourhood Associations, staff feel confident that; i) SO CAN has been provided an accurate reflection of what programs need to be charged a fee, and ii) the tariffs should have minimal impact on the Neighbourhood Associations. SOCAN Tariffs SOCAN has several categories of tariffs (see Appendix A). The City recognizes that, as the facility owner, we have a certain responsibility to pay SOCAN fees. At our community resource centres, even though the majority of programming is provided by Neighbourhood Associations, the City still provides direct programming (e.g. summer playgrounds and youth programming) that will at times use music. As such, staff is suggesting that the City of Kitchener cover the costs associated with Tariff 21 (Recreational Facilities Operated by a Municipality) which amounts to $196.17 for each facility in 2007. In some instances this tariff will cover the fees for the entire facility including all Neighbourhood Association programs. However for those Neighbourhood Associations that have total revenue exceeding $15,422.88, additional tariffs will apply and need to be paid by the user group. FINANCIAL IMPLICATIONS: The tariff being charged to the City of Kitchener by SOCAN is not negotiable. SOCAN can take legal action if the City does not pay. The City recognizes its responsibility as the owner of the facility to pay a portion of the fees. Since each Neighbourhood Association directs its own level of programming, staff suggest that any tariffs charged over and above the base amount should be billed back to the Neighbourhood Associations. CSD-07-035 Page 3 Following is an overview of fees charged by SOCAN for programs and services involving music for 2007. It should be noted that amounts have to be confirmed with the Neighbourhood Associations. Proposed Fees Charged Cost Covered by Back to Neighbourhood City of Kitchener Associations Operating Facility Operating Budgets Within the Facility Breithaupt Centre $ 1218.72 Breithaupt Pool $ 782.60 Forest Heights Pool $ 850.65 Lyle Hallman Pool $ 417.39 Harry Class Pool $ 67.84 Cameron Heights Pool $ 67.84 Chandler Mowat Community Centre $ 196.17 Kingsdale Community Centre $ 196.17 Centreville Chicopee Community Centre $ 196.17 Mill Courtland Community Centre $ 196.17 Rockway Senior Centre $ 196.17 Bridgeport Community Centre $ 196.17 Victoria Hills Community Centre $ 196.17 $ 350.88 Doon Pioneer Park Community Centre $ 196.17 $ 1 03.26 Country Hills Community Centre $ 196.17 $ 414.77 Stanley Park Community Centre $ 196.17 $ 398.52 Forest Heights Community Centre $ 196.17 $ 366.76 Downtown Community Centre $ 578.46 Total: $ 6141.37 $ 1634.19 Adjustments will be made in the 2007 operating budgets to accommodate for the SOCAN costs associated with City run direct programs and services. Modifications will also be made in 2008 to the appropriate fees and charges to recuperate the tariffs. While SOCAN has invoiced the City of Kitchener for all SOCAN tariffs payable in 30 days, they have agreed to wait for receipt of payment for those invoices to Community centres so that SOCAN reps and Community Service staff have the opportunity to properly inform Neighbourhood Associations about the SOCAN tariffs. Facilities that do not offer programs run by Neighbourhood Associations will pay the SOCAN invoices as soon as possible. The City of Kitchener is expected to pay all SOCAN tariffs within 30 days; however staff is proposing that Neighbourhood Associations are invoiced for tariffs payable by December 31, 2007. In this way, Neighbourhood Associations that are affected by the SOCAN tariffs are able to plan their fee structures for the fall sessions and build these fees into their prices. Staff proposes to review SOCAN fees early in the year 2008 to examine how it has impacted on programs and services at our facilities as well as access to affordable programs by community members. CSD-07-035 Page 4 COMMUNICATIONS: SOCAN has provided staff with details as to which programs are subject to which tariffs within each facility. These specific details will be shared with each Neighbourhood Association that operates programs out of a City facility. Staff are preparing to communicate the information to all Neighbourhood Associations in the form of a letter. In advance of the letter going out, one Neighbourhood Association received the information verbally and raised significant concerns that they were just receiving the information now. They also expressed concern about staff passing on information regarding their programs without their knowledge. Without specific information provided by city staff, SOCAN would have applied tariffs based on information they received in the Leisure Magazine and Neighbourhood Association newsletters. Staff were able to ensure that Tariffs were fair and affordable, by providing specific details and working directly with SOCAN. SOCAN representatives are preparing to meet with Neighbourhood Associations to review their programs and explain how SOCAN arrived at the tariff structure for each facility. Staff will meet with VHNA, DPPCA, CHRA, SPCA, and FHCA to review the tariffs they are being charged by SOCAN. SOCAN understands that Neighbourhood Associations run programs at low costs for the community and has tried, with the assistance of information provided by the City of Kitchener, to make the tariffs fair and manageable. Staff at all facilities will be required to provide SOCAN on an annual basis with statistics on all programs and services offered with music. SO CAN will adjust tariffs for subsequent years based on the previous year's programs offered. Mark Hildebrand, Interim Director Community Programs & Services AP CSD-07-035 Page 5 Appendix A - SOCAN Tariffs Applied at City of Kitchener Facilities: Tariff 3a Live Music SOCAN charges an annual fee of 30/0 of compensation for entertainment with a minimum annual fee of $83.65. This tariff applies to Dance Recitals. Tariff 8 ReceDtions~ Conventions~ Assemblies~ and Fashion shows Fee per event based on room capacity. SOCAN provides each facility with a fee based on their gym size. This tariff applies to Teen and adult dances. Without dancing from $20.58 to $87.40 With Dancing from $41.13 to $174.79 Tariff 15a Backaround music Annual fee is $1.23 per square metre or 11.46 cents per square foot. Minimum fee is $94.51 This tariff applies to programs like guitar lessons, youth drop in, kinder gym, pilates, tai chi, etc. Tariff 19 Fitness Activities and Dance Instruction Fees are based on average monthly attendance of $2.14 to arrive at an annual tariff amount Payable for fitness classes, dance classes, aquafit. Tariff 21 Recreational Facilities ODerated bv a MuniciDalitv~ School~ Colleae~ Universitv~ Aaricultural Society or similar community Oraanization Recreational facilities operated by a municipality, school, college, etc costs $185.07 plus GST for each facility if the total revenue does not exceed $15,422.88 per year. Tariff 21 is applicable to · Chandler Mowat Community Centre · Kingsdale Community Centre · Centreville Chicopee Community Centre · Rockway Senior Centre · Bridgeport Resource Centre · Mill Courtland Community Centre SOCAN examined the music uses at the remaining centers and could not make them eligible for T-21 licensing. The main problem was the high revenue collected from fitness and dance classes. SOCAN was able to place T-15a licenses for many of the multi-purpose rooms. This resulted in a lower "attendance" for T -19 activities. They also averaged out attendance for T -19 activities taking into consideration that most of the centres did not operate programs during the summer. SOCAN requires that the various teen dances are licensed under Tariff 8. (Cost is determined by the size of the gym but will be about $60 per dance.) Dance recitals that charge ticket sales will be licensed under Tariff 4a (concert) and will pay 30/0 of ticket sales. E.g. 900 tickets at $3 each is about $81 dollars for the recital. CSD-07-035 Page 6 Following are SOCAN's tariffs for each centre whose Neighbourhood Association's revenue exceeds Tariff 21 requirements: Victoria Hills Community Centre T-15a to cover Youth Drop In (GYM) $94.51 T-19---Average # of Weekly Participants=197 $421.58 Stanley Park Community Centre T-15a in Dance Room to cover Guitar Lessons $94.51 T-19---Average # of Weekly Participants=218 $466.52 Country Hills Community Centre T-15a in Room 2 and Room 4 to cover Guitar and Background Music $ 94.51 for each room T-19---Average # of Weekly Participants=181 $387.34 Doon Pioneer Park Community Centre T-19---Average # of Weekly Participants=132 $282.48 Forest Heights Community Centre T-15a in Room 1 to cover Guitar $94.51 T-19---Average # of Weekly Participants=204 $436.56